A Scottish Government initiative to boost its shared equity scheme and help homeowners at risk of repossession has been broadly welcomed by housebuilders and lenders.

Health Secretary, Nicola Sturgeon, announced a £250 million expansion of the Government's shared equity schemes for first time buyers and said that the Government would provide £25 million for those at risk of repossession.

Ms Sturgeon said: "I recognise that current market conditions are fluid and require a flexible response from Government, but the root cause is reduced liquidity, not reduced demand". She added: "We're backing our commitment to the Low-cost Initiative for First Time Buyers - LIFT - with plans for a £250 million investment over the next three years to support hard-pressed first time buyers by expanding our shared equity schemes. This will help more people to achieve their home ownership aspirations, where that is sustainable for them".

Homes for Scotland welcomed the £250 million boost to first time buyers.  Chief Executive, Jonathan Fair, Said: "It is clear that Ms Sturgeon has recognised that providing support to First Time Buyers is now absolutely key to the health of the sector, therefore we welcome her commitment to investing £250 million over the next three years, through the expansion of the Government's LIFT shared equity scheme.  We are also encouraged by her commitment to increasing the level of its ‘Home Owners Support Fund' through an investment of over £25 million within the Government's ‘mortgage to rent' scheme.

But he also called on the government to allow all Registered Social Landlords to buy both land and unsold stock from developers - a move which would mop up excess supply in some sectors and increase the amount of housing controlled by social landlords.

Kennedy Foster, CML Scotland policy consultant said:  "The creation of the homeowners' support fund is a welcome move and will reinforce the steps lenders are taking to support borrowers in difficulty. We look forward to consulting with the Scottish government on this fund and fully support calls for the UK government to reform Income Support for Mortgage Interest. We hope that these moves will encourage Ministers down in Westminster to stop dragging their heels on reforms to the state safety net, which are urgently needed to help those borrowers who encounter a severe change in their financial circumstances".